Creating a Small World City: Social Impact Assessment of Noto Ryugaku, an Internship Program Established by a Private Community Development Corporation

Misogi-gawa Corporation – Private Community Development Company

Misogi-gawa Corporation, named after the Misogi River, is a private community development company established in 1999. Based in Nanao City Noto Peninsula, Ishikawa Prefecture, it operates Noto Style, an e-commerce store selling Noto’s specialty products online, and carries out human resource development projects. The photo above shows the Misogi River in Nanao City and shops located along it.

The mission of Misogi-gawa Corporation is to “create a small world city” and build a local sustainable society. To realize our mission in the Noto region, where the population is declining and aging rapidly, Misogi-gawa Corporation strikes to facilitate the circulation of natural resources and local human resources.

The business activities of Misogi-gawa Corporation are shown in Figure 1. below.

Noto Ryugaku

The Noto Ryugaku Program is a long-term practical internship program that began in 2011, in which university students work as interns at host companies and villages in the Noto region. The Misogi-gawa Corporation’s coordinators identify issues at these host companies, design projects to solve them, recruit interns, and support the matching process. With the coordinators’ support, the host companies and interns can proceed with the project smoothly and make progress in resolving the companies’ issues. So far, 161 students have taken part in the Noto Ryugaku Program.

Social Impact of Noto Ryugaku

We measured the social impact of the Noto Ryugaku Program using Social Return on Investment (SROI). We use this framework because it considers a wide range of social values, including those that are difficult to convert into monetary values. According to our estimation, Noto Ryugaku Program created JPY 207,960,000 worth of social impact within 8 years. Table 1. below shows stakeholders, input, and created outcomes within 8 years of the Noto Ryugaku Program. Company outcomes are calculated from the average SROI of each company that participated in the project. During the last 8 years, 161 interns participated in the project; among them, 132 worked at the host company.

How SROI is calculated

SROI is one of the ways to evaluate the impact brought by a social project. It is calculated by converting the social values obtained by the program into monetary value and dividing it by the costs invested in the project. The invested costs include the matching fees paid by the host companies and the time spent by the people involved in the project, which is converted into labor costs. We took few steps to  determine what kind of social impact the Program created. First we designed a logic model to identify the project’s inputs, outputs, and outcomes. Next, we determined  the project’s effects through interviews with stakeholders who participated in the Program. Finally, we calculated the SROI according to the formula below.

SROI = Social value converted into monetary value ／ Invested costs

4 out of the 30 companies that have recruited interns in the Noto Ryugaku Program were interviewed. The overall SROI was calculated by taking the average of the SROIs results of these four companies. In addition, 132 former interns answered a questionnaire regarding the values created for them.

The overall SROI of the Noto Ryugaku Program over 8 years was 2.43¥. This value  shows that the social impact created by Noto Ryugaku was more than twice that the investment. Detailed information about created social impact and SROI for the four surveyed companies are shown in Table 2. below. Based on each company’s SROI it was found that the social impact tended to be higher for the companies that accepted interns continuously.

Case Study: Overseas Business Development of a Japanese Candle Shop

Takazawa Shoten, a long-established Japanese candle shop, which has been running a business in Nanao City Noto Peninsula for over 130 years, conducted a marketing project to promote their traditional products overseas. Through participating in the Noto Ryugaku Program, Takazawa Shoten succeeded in hiring a sales representative in charge of the foreign market and establishing an overseas business division. As a result, Takazawa Shoten was able to identify potential overseas business partners and promote their products on social media to the customers worldwide. The photo below shows an intern introducing local products to foreign customers.

Figure 2 below shows a Logic Model of Takazawa Shoten’s internship project. By accepting 3 interns at the Takazawa Shoten, the company raised employees’ awareness of overseas businesses’ importance. This activity led to the successful recruitment of a permanent employee in charge of the overseas business division.

Toward a Small World City

The regional SROI is omitted in this study since estimating the regional input is extremely difficult. Nevertheless, in the process of assessing the social values brought by the Noto Ryugaku Program, we were able to confirm that creating sustainable social impact depends on implementing projects on an ongoing basis. 

The Noto Ryugaku Program has also led to new opportunities in the region, such as the creation of new businesses and new job opportunities for the local people.  Some former interns have even started their social enterprises. 

Thus, over time, impacts change and interact with each other. Once again, in order to “create a small world city,” it is important to share how the entire region’s ecosystem is growing while working to resolve issues at individual companies. In the future, based on the calculated SROI, we would like to study the possibility of using Social Impact Bonds (SIB) in cooperation with the Nanao City local government to make effective use of the resources within the region.